U.S. New Home Sales Spike Much More Than Expected In July

New home sales in the U.S. saw another substantial increase in the month of July, according to a report released by the Commerce Department on Tuesday.

The report said new home sales spiked by 13.9 percent to an annual rate of 901,000 in July after soaring by 15.1 percent to a rate of 791,000 in June.

Economists had expected new home sales to climb by 1.2 percent to a rate of 785,000 from the 776,000 originally reported for the previous month.

The much bigger than expected jump lifted new home sales to their highest annual rate since reaching 998,000 in December of 2006.

New home sales in the Midwest led the way higher in July, skyrocketing by 58.8 percent to an annual rate of 127,000.

The Commerce Department said new home sales in the South and West also surged up by 13.0 percent and 7.8 percent, respectively, while new home sales in the Northeast plunged by 23.1 percent.

The report also said the median sale price of new houses sold in July was $330,600, down 1.9 percent from $337,000 in June but up 7.2 percent from $308,300 in the same month a year ago.

The estimate of new homes for sale at the end of July was 299,000, representing 4.0 months of supply at the current sales rate. The months of supply is down from 4.6 months at the end of June.

Last Friday, the National Association of Realtors released a separate report showing existing home sales also continued to soar in the month of July.

NAR said existing home sales skyrocketed by a record 24.7 percent to an annual rate of 5.86 million in July after spiking by 20.2 percent to a revised rate of 4.70 million in June.

Economists had expected existing home sales to jump by 14.0 percent to an annual rate of 5.38 million from the 4.72 million originally reported for the previous month.

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